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Is There a Reverse U-Shaped Relation between Financial Development and Income Distribution? Comparison between Developed Countries and Transforming Countries

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DOI: 10.4236/jss.2015.33030    2,690 Downloads   3,642 Views Citations
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ABSTRACT

Researching relation between financial development and income distribution is always a hotspot issue of theory. In 1990s, Greenwood and Jovanovic proposed the reverse U-shaped relation model between financial development and income distribution. Related scholars conducted empirical analysis accordingly but there was always no consistent conclusion. In this paper, whether there is a reverse U-shaped relation between financial development and income distribution is verified via different country types. USA, UK and Germany are taken as representatives of developed country; China, Russia and Brazil are transforming countries to respectively carry out empirical analysis to relation between financial development and income distribution, and it is found that: there is no reverse U-shaped relation between financial development and income distribution in developed countries, nevertheless there is an apparent reverse U-shaped relation in transforming countries.

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Liu, Z. and Wang, Q. (2015) Is There a Reverse U-Shaped Relation between Financial Development and Income Distribution? Comparison between Developed Countries and Transforming Countries. Open Journal of Social Sciences, 3, 201-209. doi: 10.4236/jss.2015.33030.

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